Verizon Wireless, 5G Business Solutions Buoyed Carrier In 2023

As Verizon Business revenues continued to dip in Q4 2023 and during the full year, the carrier is seeing interest from large enterprises for the carrier's 5G business solutions and private networking as it heads into 2024.

Verizon is seeing rising demand for mobility, broadband and private networking heading into 2024 despite declines in the carrier's Business segment, Verizon CEO Hans Vestberg said during the carrier's Q4 2023 and full-year earnings call Tuesday morning.

The telecom titan's full-year 2023 wireless service revenue was $76.7 billion, up 3.2 percent from full-year 2022. During fourth-quarter 2023, total wireless service revenue was $19.4 billion, up 3.2 percent year over year, which the carrier said was driven primarily by pricing actions implemented in recent quarters, higher premium price plan adoption and growth from fixed wireless access offerings.

Fourth-quarter 2023 marked the tenth consecutive quarter that Verizon Business reported more than 125,000 postpaid phone net additions, the company said. Verizon Business reported 292,000 wireless retail postpaid net additions in the fourth quarter of 2023, including 131,000 postpaid phone net additions.

For the full year, Verizon Business added 562,000 phone net adds. Vestberg called the business wireless result "outstanding," during the call.

"Our business customers are prioritizing mobility and value the optionality we offer with highly tailored plans on the best network in the country," Vestberg said during the carrier's fourth-quarter earnings call with investors.

The Business segment reported 144,000 fixed wireless net additions in fourth-quarter 2023. The speed of adoption of fixed wireless access had Verizon "super excited," Vestberg added.

"We expect this to be a long-term source of recurring revenue for Verizon and we are entering this year with a strong base for continued growth.

At the same time, Verizon continues to see interest from large enterprises for the carrier's 5G business solutions and private networking, Vestberg said.

"Strategically, we're building a new source of revenue expansion where we are the clear leader," he said.

Q4 and Full-Year 2023 Results

Total operating revenue for Verizon Business, which includes the company's Global Enterprise Solutions, SMB, public sector and wholesale businesses, dipped 3.6 percent on revenue of $7.62 billion during the fourth quarter compared with $7.90 billion in the year-ago quarter. The company said this decline could be attributed to lower wireline revenue and lower wireless equipment revenue.

Enterprise Solutions fell 3.1 percent during fiscal 2023.

Business wireless service revenue was $3.36 billion, an increase of 3 percent year over year and 4.1 percent for the full year, which Tony Skiadas, Verizon's CFO who was promoted in May, said was driven by continued strong net additions.

Global enterprise and public sector revenue continued to trend downward, falling 4.9 percent to $3.72 billion in revenue in fourth-quarter 2023 compared with $3.91 billion a year ago. enterprise and public sector revenue fell 3.9 percent during fiscal 2023.

Business markets revenue declined slightly by 0.4 percent during the full year and also during the quarter to $3.32 billion from $3.30 billion in the year-ago period. Wholesale revenue fell 12.1 percent to $582 million during the fourth quarter of 2023 from $662 million one year before and fell 10.6 percent during the full-year.

For the fourth quarter that ended December 31, Verizon reported operating revenue of $35.13 billion for the fourth quarter, down a slight .3 percent from $35.25 billion in the fourth quarter of 2022. The decrease, according to the carrier, could be attributed to wireless equipment revenue, which was 2.0 percent lower than 2022, as total postpaid upgrades also declined by 17.9 percent.

The carrier's net income was negatively impacted billion in Q4 2023. Verizon reported diluted earnings per share of negative 64 cents in the fourth quarter of 2023 compared with $1.56 in fourth-quarter 2022.

Full-year 2023 revenue was $134 billion, down 2.1 percent year over year. Verizon's diluted earnings per share for the year was $2.76, down 45 percent from $5.06 in 2022.

The Basking Ridge, N.J.-based carrier beat Wall Street's expectations of $34.60 billion in revenue during the fourth quarter of the year.

Verizon began taking actions to more efficiently run its business in 2022 with the creation of the Verizon Global Services organization, which the carrier said would help free up more capital to the tune of $2 billion to $3 billion by 2025 so Verizon could further invest in its core networking and telecom services. Skiadas said that Verizon saw $300-$400 million in savings in 2023.

Verizon's stock rose more than 5 percent Tuesday to $41.82 as revenue topped estimates.